A staggered board

Question

A staggered board

Quizplus · Accepted Answer

A staggered board has only a portion of the board stand for election each year, meaning that not all board members can be replaced at once. This reduces the chances of a hostile takeover by making it harder for a group of shareholders to gain control of the entire board at once. It also makes it harder for shareholders to curb a CEO's power since the CEO can have a stable board that supports them. This is a common practice in the U.S. with over 50% of boards using staggered terms. Therefore, option B, which states that a staggered board has only a portion of the board stand for election each year, is the best choice.

A Staggered Board